Tips on How to Save on Your Housing Loan Interest Rate
Anyone looking to buy a new house will of course want to save on the housing loan interest rate that comes with the loan. Everyone takes this percentage into careful consideration before they apply for a mortgage loan from a certain bank. However, it is not uncommon that one or two of these people may not really understand what they are paying for and are just looking at the figures that are being presented to them. In order to be able to save money on their mortgage loan interest rate, thorough research is very important.
In Singapore, prospective homeowners have the option of choosing between a fixed rate and a floating housing loan interest rate. The floating interest rate structures are called SIBOR and SOR. These rates are determined based on the performance of the world market. A fixed mortgage interest rate is based on the tenure, the income of the person applying for the loan as well as the total cost of the house. Before you decide on which loan structure you would be choosing, make sure that you weigh pros and cons of each one. Ask all the questions that you may have during your meeting with the bank’s loan manager. Always remember that acquiring a mortgage loan will benefit both parties; you get your house while the bank receives business. So you have every right to ask questions and negotiate the terms until you come to an amicable agreement with the bank. Also, keep in mind that each bank offers a different mortgage loan interest package. Shop around so you can compare these packages before you make your final decision.
Another tip that you can consider when trying to save on your housing loan interest rate is to make a sizable down payment for the home you want to purchase. Banks determine their client’s capability to pay through a number of reasons, and being able to show your loan manager that you are able to make a considerable amount of investment toward your new home will increase your chances of being able to obtain a lower interest. Aside from this, make sure that your credit history is in order and that no false information is contained in your credit report, as banks use these criteria when determining the eligibility of the loan borrower. Do not just go for the first loan package that you see but rather take the time to compare between loan providers and the contracts they are offering so you can obtain the most suitable housing loan interest rate for you.
The interest applied to your housing loan greatly affects the amount you will be required to pay for your loan, so it is important to take stock of all possible factors that can influence interest rates and how they affect you as an end user. The savings you acquire from low interest rates will allow you to spend the money on other matters that are important in your home. Choose which housing loan interest rate suits you the most as well as your capacity to pay in order to pay off your loan according to the specified contract.